Obesity-associated insulin resistance plays a central role in the pathogenesis of obesity-associated diabetes. Inhibiting protein tyrosine phosphatases that dephosphorylate and inactivate the insulin receptor is considered a promising approach to decrease insulin resistance in obesity. This grant focuses on a tyrosine phosphatase that directly associates with and dephosphorylates the insulin receptor, called the low molecular weight protein tyrosine phosphatase (LMPTP). LMPTP is highly expressed in insulin-target tissues. Human genetic studies and in vivo data obtained from mice carrying reduced expression of LMPTP suggest that LMPTP promotes diabetes and insulin resistance in obesity. Our goal is to validate LMPTP as a drug target for obesity-associated diabetes by demonstrating that chemical inhibitors of LMPTP ameliorate diabetes in mouse models of obesity. We screened the NIH chemical library for inhibitors of LMPTP, and identified a reasonably potent and selective compound -ML400- that selectively inhibits LMPTP in vitro and is active in cell-based assays of LMPTP activity. We have preliminary evidence that ML400 is active in vivo and ameliorates glucose tolerance in a model of diet-induced obesity. Importantly, inhibition of LMPTP by ML400 occurs through an uncompetitive mechanism of action, suggesting that ML400 targets a novel allosteric site of the phosphatase. The aims of this proposal are to optimize potency and selectivity of ML400 through chemistry (Aim 1), identify the allosteric site targeted by ML400 on LMPTP (Aim 2) and perform in vivo studies with the lead compounds to demonstrate that inhibition of LMPTP improves insulin resistance in obese mice (Aim 3). The proposed hit-to-lead work will yield a highly potent and selective inhibitor of LMPTP and provide proof-of-principle evidence that inhibition of LMPTP is beneficial to effectively treat one of the most common metabolic complications of obesity. Our lead inhibitor can further proceed through preclinical validation in obesity and also will be useful to further elucidate the biology of LMPTP in vitro and in vivo. In addition, the identification of the allosteic site targeted by the inhibitor will enable further future rational targeting efforts for developmen of inhibitors with therapeutic potential.